Transcript: Axelrod

Oct. 18, 2009

Page 6 of 17

AXELROD: Well, we need to account for the things we're doing. We have a stimulus program in place, an economic recovery program in place, that is not even 50 percent through. We have to see that through. And we'll see what other measures we need to take.

STEPHANOPOULOS: Let me also ask you a question about Wall Street. We saw Wall Street for about -- for a moment this week top 10,000 on the strength of some pretty stunning earnings out of big banks, like JPMorgan and Goldman Sachs. And we've also seen now that Goldman Sachs is likely to pay out more bonuses this year, $23 billion, than it did at the peak of the market, in 2007.

Here's what the president had to say about bonuses back in January.
(BEGIN VIDEO CLIP)

OBAMA: There will time for them to make profits, and there will be time for them to get bonuses. Now's not that time. And that's a message that I intend to send directly to them.
(END VIDEO CLIP)

STEPHANOPOULOS: So is it OK with the president now for banks like Goldman Sachs to pay the biggest bonuses ever?

AXELROD: Well, look, the bonuses are offensive. And to the -- for the firms that still have federal TARP money, there's some jurisdiction. The paymaster at Treasury is -- is working on that, to try and limit that. You've seen a lot of firms go to stock rather than cash, so at least people have a stake in the success of their company and they're not just walking away with cash, making short-term decisions that are bad for their institutions and the economy.

But here's the bigger thing, George. The most offensive thing is, we haven't seen the kind of increase in lending that -- that we should.

There are a lot of small businesses, creditworthy businesses around this country who still can't get the capital they need to grow, which is important for our economy, and you've seen these same institutions spend tens of millions of dollars lobbying the Congress to -- to try and -- and stop financial regulatory reform, to stop the kind of reforms that we need to prevent the disaster we just saw and to protect consumers. And that -- that is most offensive.

And the thing the president, his priority right now is to pass that financial regulatory reform, defeat the lobbyists for the banks...

STEPHANOPOULOS: But what does the president...

AXELROD: ... and do what's right for the country.

STEPHANOPOULOS: What does the president say to Goldman Sachs right now about those bonuses?

AXELROD: Well, they ought to have -- they ought to -- first of all, we have, as I said, limited sway other than moral suasion with some of these -- a lot of these institutions.
STEPHANOPOULOS: They are getting an awful lot of money from the Fed.

AXELROD: They ought to -- they ought to -- they ought to think through what they're doing, and they ought to understand that, a year ago, a lot of these institutions were teetering on the brink. The United States government and taxpayers came to their defense.

They have responsibilities. They ought to meet those responsibilities. And they ought to express them by increasing lending, which is what we need right now, and by standing down and allowing the kinds of reforms we need to protect consumers and protect the country from the sort of disaster we've seen.